YPO Global Pulse: Business confidence in Africa edges up in the third quarter of 2016
Confidence among African business leaders climbs for third consecutive quarter
JOHANNESBURG, Nov. 01, 2016 (GLOBE NEWSWIRE) — YPO, the premier chief executive leadership organization in the world, reported today that confidence amongst business leaders in Africa increased during the third quarter of this year. Having reported a significant and ongoing loss of economic confidence during 2015, sentiment among chief executives in the region has bounced back in the first three quarters of 2016. The YPO Global Pulse Confidence Index for Africa, which tracks economic confidence levels among chief executives in the region on a quarterly basis, rose 1.7 points to land at 55.5, its highest level since July 2015.
Africa is now the second least optimistic region in the world, surpassing the Middle East and North Africa region, which recorded the lowest score of any region around the world in the latest survey. However, Africa once again trailed the global composite score of 59.2 in the last quarter.
The steady improvement in economic confidence across Africa was largely fueled by a more positive outlook among business leaders in South Africa. The YPO Global Pulse Index for South Africa increased for the third consecutive quarter, jumping 2.8 points to 60.3. This represents its highest level for 18 months, firmly back in optimistic territory.
The YPO Global Pulse Index for Nigeria recorded the largest drop in confidence of any region around the world, by a significant 9.9 points to a dismal score of 44.2, following a 14.6-point increase the previous quarter. This volatility in sentiment amongst business leaders in Nigeria, which is the largest oil producer in Africa, coincides with the instability and uncertainty in the global oil sector during 2016.
Elsewhere, Zimbabwe saw a marked improvement in sentiment, jumping 7.1 points to 47.2, its highest level for a year.
“These results show that there are significant differences in economic outlook across Africa, but in general, it seems that confidence among business leaders in Africa is improving, albeit at a cautious rate. Chief executives in the region will naturally maintain a level of concern about the economic climate, particularly with so much uncertainty about the stability of the oil prices and the global economy as a whole,” said Bobby Kamani, managing director of Zuri Group Global and a member of the YPO Nairobi Chapter. “As business leaders turn their attention to planning for 2017, they will do so in a cautious but positive frame of mind, confident that there are opportunities for growth and investment in the coming year.”
Globally, the YPO Global Pulse Index for the third quarter of 2016 fell by half a point to 59.2. The highest levels of confidence were reported in the European Union, which climbed 2.2 points to 60.7. Close behind was the United States, where confidence remained stable in the third quarter, edging down 0.4 point to 60.4. Asia fell 2.9 points to land at 60.0, as the world’s three largest economic regions reported confidence levels within one point of each other. Elsewhere, confidence in Latin America increased by 1.5 points to 55.9, whilst confidence in the Middle East and North Africa fell 2.0 points to 53.9, making it the most pessimistic region in the world.
Key findings in Africa
Mixed feelings about short-term economic environment
When asked about the economic and business conditions affecting their organisations in the next six months, business leaders in Africa were split. Almost one-third (31%) of chief executives s predicted conditions would improve, compared to 29% who expected conditions to deteriorate. The remainder felt the economic environment would remain relatively unchanged.
Business leaders remain positive about prospects for their own organisations
Although chief executives in Africa again reported concerns over the general economic climate, the majority remained firmly optimistic about the outlook for their own organisations. The three key indices in the study, measuring sales, hiring and fixed investment, all saw improvements in the third quarter.
Two-thirds of Africa business leaders forecasted an increase in sales in the next year, while only 15% expected sales to decline.
A third expected to increase their headcount over the next 12 months, compared with only 11% who anticipated that their workforce would be reduced.
Almost half of business leaders (48%) predicted an increase in fixed investment in the next year, versus only 12% who expected to cut investment levels in that period.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of October 2016, gathered answers from 1,625 YPO chief executive officers across the globe, including 151 in Africa. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
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